Competition forces Honda to revamp new Civic
ROMULUS, Mich. — Honda is scrambling to revamp its Civic just eight months after a new version hit showrooms, and critics say it's an admission that the compact car fell short in quality and handling.
The revamp, to come by the end of next year, is unprecedented because new models aren't usually overhauled for at least three years. Honda executives say they're simply trying to stay ahead in an increasingly competitive small-car market.
The new version of the Civic started arriving at dealerships April 20 and was panned by critics. Consumer Reports magazine said it was less agile than its predecessor, and its interior quality was worse. The magazine refused to give the Civic its coveted "Recommended Buy" rating, saying that the braking distances were long and it suffered from a choppy ride.
The old Civic, which came out in 2005, was known for its sporty driving, high-quality interiors, lack of noise and excellent braking, says David Champion, senior director of auto testing for Consumer Reports.
"The new one seems to have fallen apart in those areas," says Champion, who thinks that Honda cut costs with the 2012 version.
Honda has told dealers a reworked Civic will arrive before the end of 2012.
American Honda President Tetsuo Iwamura said Tuesday that the Civic is still the leader in compact cars. Honda will improve the Civic's drivability, but Iwamura stopped short of saying exactly what the company will do to the rest of the car.
"It's about how do we get two or three laps ahead of the competition," said American Honda Executive Vice President John Mendel.
In the past two years, the usual compact-car race between Honda and Toyota has become a free-for-all that includes high-quality entries from Chevrolet, Ford and Hyundai. Small cars from those companies threaten the Civic, a perennial top seller.
The Civic for years has battled with the Toyota Corolla as the top-selling compact in the U.S., but this year both cars were thrown off kilter by the March earthquake and tsunami that disrupted parts production in Japan. Honda production only recently returned to normal, and Mendel doesn't expect dealers to be fully restocked until March.
At the same time, the competition was rolling out new models like the Chevrolet Cruze, Hyundai Elantra and Ford Focus. During the summer months the Cruze was the top-seller.
All automakers have been forced to improve their compacts because they need to sell more of them in order to meet stricter government fuel economy regulations, Mendel said. Carmakers have agreed to double the average fuel economy of the fleets they sell to 54.5 miles per gallon by 2025.
The competition will be good for consumers because carmakers will offer better small cars and could discount them as the competition heats up, Mendel said. But he said Honda would continue to show restraint on discounts, selling its products based on their value rather than price.